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Importing gold is impossible now

Jewellers fear that RBI notice on bullion import-export will encourage smuggling.

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Jewellers and bullion traders of Ahmedabad have gone bonkers after the Reserve Bank of India (RBI) made the export of one-fifth of the total gold import compulsory. They said importing gold would be impossible now and the RBI ruling would force them to smuggle gold to fulfill their customers’ demands.

Owing to the RBI notice, the Ahmedabad bullion market witnessed zero deals among traders and retailers. “When we go to bank to buy gold, they show us the RBI notice which says that we have to keep 20 per cent of that aside for export. We are not exporters. We do not even have any export orders. So, not a single bullion trader or jeweller in Ahmedabad bought gold on Tuesday. This would lead to gold entering the country via illegal means,” said Zaveribhai Zaveri, president of the Gujarat chapter of All India Gems and Jewellery Trade Federation.

Last year, India imported around 900 tonnes of gold and the jewellers exported about 58 tonnes, said Ahmedabad-based bullion trader Vasu Parker of Parker Bullion. “Now, importing gold is next to impossible. The gold jeweller export was less than 10 per cent of the total gold imported the previous year. There are a few jewellers in south India and Mumbai who are exporting jewellery. But the volume is very less. The RBI notice will encourage jewellers to buy gold from smugglers as importing gold has become practically impossible,” he said.

According to Parker, there are about 20 lakh gold traders and jewellers in the country. “Of them, less than 200 are exporting jewellery. If the import of gold is discontinued, as many as 40 lakh direct and indirect employees of the industry will lose their jobs,” he said.

The jewellers’ association claimed that many jewellers of Ahmedabad have stopped selling gold coins and bars. “Yet, the government hiked the duty on gold import. Now, RBI comes up with a new rule. But, gold is like a flowing river. It will find its way. For instance, a father will somehow manage to buy gold even at a premium for his daughter during her marriage. If the government or RBI does not allow that, other channels will surely bring bullion to the city,” said Girish Choksi, a bullion trader of Ahmedabad.

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